Oil Futures Saw Below 1% Decline, OPEC Still To Decide Upon Production Cuts

On Monday, November 30, after a rise of 1.1 percent during Friday trading, price of oil futures declined -0.4 percent to $45.34 per barrel while Brent crude oil prices consolidated at $47.59 per barrel after falling -0.8 percent on the day.

The OPEC+ conference, which is expected to result in a decision on production volumes for 2021, will be the focus of attention in the next two days. There have been market expectations in November that the alliance will retain the current quotas for the first 3-6 months of next year. In the oil market, which is still under pressure due to the coronavirus pandemic, this will balance supply and demand.

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In recent days, however it has begun to appear that there is no consensus among the member countries of the organization on future production quotas. According to a variety of media outlets, as originally believed under the current terms of the agreement, Iraq and the UAE are in favor of easing quotas from the beginning of 2021.

In the short term, if countries do not agree on a corresponding rise in demand, this may lead to an over-supply of 1.5-3.0 million barrels per day in the oil market, which would adversely affect the price dynamics of ‘black gold.’

Among other factors that could have an effect on the oil market in the near future includes the ongoing tensions in the Middle East region. On Monday, a rocket attack was carried out on one of Iraq’s largest oil refineries, causing a fire to break out in the company’s territory.

An oil tanker was struck by a mine in the Red Sea last week and a missile attack was carried out on Saudi Aramco’s production facilities a little earlier. The supply of oil and petroleum products has not been interrupted as a result of these events, but supply disruptions cannot be ruled out in the event of further destabilization of the situation in the region.


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